Make a Run For the Border, Gringo

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Recently by Eric Peters: Breakin' the Law…

Newtie won’t bring you $2 gas – and forget about BHO. He wants to bring you $8 gas – in line with what Enlightened Europeans pay. But there is a way to fill your tank for about $2 per gallon – using the Fed Funny Money in your pocket, too.

Just drive across the border.

It’s what a growing number of Arizona drivers are doing, according to a March 20 article over at myfoxphoenix.com (see here).

They’re willing to brave the Mexican banditos in the border towns – in order to do an end-run around the American banditos in Washington.

Gas prices are so much lower in Mexico for a number of reasons, including government price controls – but the point to be taken is that physical scarcity is not an issue south of the border. There is an ample supply of oil. If there weren’t, the prices would be going up everywhere, not just here.

There is plenty of oil here, too. But the difference is the (note, not our) government has done just about everything conceivable to thwart exploration and development, creating a contrived shortage. No one can say how much oil is in the ground (or under the sea) if we’re not allowed to look for it.

Let alone extract it.

The (again, not our) government also imposes Byzantine requirements that fuel in different parts of the country at different times of the year contain different types and quantities of various additives (such as ethanol oxygenates, a fancy-sounding way of obfuscating taxpayer-financed giveaways to politically powerful agricultural cartels) further bolixing up supply.

Instead of “just gas” there are multiple different types of gas, each of which must be kept separate from the others in the pipelines, tanker trucks and so on. This adds considerably to the cost and not just mechanically. Because gas has a shelf life, the refiners only produce enough at any given time to meet estimated short-term demand. The differing requirements for different regional formulations and additive packages put pressure on the refiners to make smaller batches of each type, which can lead to short-term shortfalls if actual demand exceeds projected demand. If a given refinery is making Batch X, it’s hard for it to stop the presses and make some more of Batch Y – at least, until they’ve cleared out all the Batch X.

In Mexico, there’s just gas.

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Eric Peters [send him mail] is an automotive columnist and author of Automotive Atrocities and Road Hogs (2011). Visit his website.

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